HDR hardman resources limited

hdr - chinguetti approval next month

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    from todays west australian
    WOODSIDE Petroleum and its joint venture partners meet early next month to endorse a $1 billion development plan for their Chinguetti oil discovery off the coast of Mauritania in north-west Africa.

    The international consortium is set to give the all clear for the plan which calls for a 10-well development that would produce oil into a floating production and storage facility, with first production possible in late 2005.

    First production from the 100 million to 125 million barrel oilfield is expected to flow at a daily rate of 75,000 barrels.

    Woodside is the 35 per cent partner and operator of the development, a first for the group in an overseas location.

    Chinguetti is also one of three projects Woodside has said would be fast-tracked to offset the forecast slide in its production for the next couple of years in the absence of it making a sizeable acquisition in the US.

    The other Australian partners in Chinguetti are the group that originally involved Woodside in the Mauritanian deep water salt basin play, Perth-based Hardman Resources (21.6 per cent), and the Sydney-based Roc Oil (2.4 per cent). The remaining equity interests in the development - it will be a first for the fish and iron ore dependent Mauritanian economy - are held by the Italian energy giant Agip (35 per cent) and the UK-listed Fusion Oil (6 per cent).

    Financing its equity participation is a bigger issue for Hardman than it is for any of the other partners.

    The group has appointed the London office of ANZ Investment Bank to advise on the loan facility required, with approaches to developing country specialists like the World Bank's International Finance Corporation likely.

    Woodside will be watching with interest. It holds 11 per cent of Hardman after taking up two placements in the group, one in July 2001 and the other in October last year. The group's average entry price is about $1.05 a share or a total of $39 million.

    The average entry price compares with Hardman's closing price on Friday of 57¢ a share. That the market does not currently value Hardman shares as highly as Woodside has in the recent past continues to fuel speculation on an eventual Woodside takeover of Hardman.

    Helping to keep the speculation burning is Hardman's strategic position across Mauritania's offshore oil fairway.

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